In an order dated 2nd July, 2020, the Telangana High Court granted relief to M/s. Yadadri Life Sciences Pvt. Ltd. when it directed the State Bank of India to extend the deadline under its One-Time Settlement (OTS) scheme by 90 days. The matter was heard by a division bench of Justice A. Rajshekhar Reddy and Justice K. Lakshman, JJ. The petitioner sought a writ of Mandamus, declaring the respondent Bank’s action of not considering the petitioner’s request for providing it with an extended period of 90 days for the payment of OTS amount, as illegal and arbitrary. It complained that the Bank did not take into consideration the difficulties faced during the prevailing pandemic (M/s. Sri Yadadri Lifesciences P Ltd. Vs M/s. State Bank of India)
Mrs. Almas Mohammed, learned counsel on behalf of the petitioner, submitted that the petitioner could pay only 20 per cent of the OTS amount and the balance 80 per cent could not be paid due to the COVID-19 pandemic. As there was no improvement, she added, the petitioner corporation was running with only 40 per cent of its staff. Due to its incapacity to pay the total amount in stipulated time, it urged the respondent Bank for further extension of time. However, the Bank refused to do so, and therefore, the given petition was filed. Sri Ambadipudi Satyanarayana, learned Standing Counsel for the respondent SBI, argued that the time for payment of amount under OTS scheme was already extended for all the borrowers till 30th June, 2020, due to the COVID-19 pandemic, hence, there cannot be any further extension. He contended that the petitioner had not paid any amount during the extended time-period of three months, so as to show his bona-fides.
The bench noted that the apex Court “has extended the limitations under several statutes, where there is no provision for condonation of delay also, till further orders, or till the lockdown is lifted.” “The Hon’ble full bench of this Court also extended interim orders taking into consideration of the prevailing COVID- 19,” it added. The Court agreed with the Standing counsel’s submission and acknowledged, “The OTS is a special scheme and time for payment under the said scheme is provided and same is extended to the petitioner, and same cannot be again extended as it will violate the very scheme itself.” However, it observed, “the situation is extraordinary, affecting the entire humanity...”
“In view of above extraordinary circumstances, we are of the opinion that the petitioner can be granted time for payment entire due under OTS till the end of August, 2020,” ordered the Bench. It further elaborated that in order to show his bona-fides, the petitioner has to pay 25 per cent of the outstanding amount by the end of July 2020, and the balance 75 per cent is to be paid by the end of August 2020. Non- compliance of the same would render it responsible for any appropriate legal action taken by the respondent Bank. One-time settlement or OTS scheme is a type of compromising settlement between the banks and its debtors. It is executed by the banks to recover bad debts or non performing assets (NPAs), wherein, the borrower (the one who has defaulted) proposes to settle all the dues at once, and the banks agree to settle for an amount less than what was originally due.
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